Shanghai showcases auto world s China hopes

April 19, 2011

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By , SHANGHAI, Apr 19 – Foreign and Chinese carmakers unveiled plans on Tuesday to ratchet up investment and introduce new models in China as Shanghai\’s auto show opened with all eyes on the world\’s largest car market.

World premieres at the show include Volkswagen\’s new retro-styled Beetle, General Motors\’ new Chevrolet Malibu, Buick Envision, and its China-only Baojun 630, and France\’s PSA Group introducing its Citroen DS5.

"China continues to present an unparalleled opportunity for our company — and for our competition," said Tim Lee, the Shanghai-based president for GM International Operations.

As the first auto show since the March 11 earthquake and tsunami disaster in Japan, source of a large number of auto components, Shanghai also will allow the industry and analysts to gauge the impact of the catastrophe on the sector.

Since the previous Shanghai auto show in 2009, China has overtaken the United States as the world\’s top car market and the event has accordingly emerged as one of the world\’s biggest auto fairs.

US giant Ford Motor Company announced plans to introduce 15 new vehicles to China by 2015 as it seeks to increase its share of the world-leading market.

"This plan reinforces our commitment to offer a full range of vehicles to new car buyers in China, the world\’s biggest and most exciting auto market," said Joe Hinrichs, chairman and chief executive of Ford China.

Ford\’s rival General Motors, the leading foreign automaker in China by sales, said on Monday it aimed to more than double its Chinese sales by 2015.

GM China Group President Kevin Wale said the US auto giant aimed to capitalise on "the unmatched opportunities that the Chinese market offers" and sell around five million cars a year by 2015, up from 2.35 million last year.

German automaker Audi\’s Q3 sports utility vehicle was making its world debut in Shanghai, with chief executive Rupert Stadler saying Tuesday China would become the company\’s largest sales market in 2011.

Auto sales in China rose more than 32 percent last year to a record 18.06 million units as its economy powered out of the world economic downturn.

Automakers are also seeking to get a foot in the burgeoning "green" car market in China, whose government is encouraging electric-car development in a drive to reduce the country\’s notorious air pollution and conserving energy.

China\’s FAW Group said Tuesday it will invest $1.5 billion to develop clean energy vehicles in the next five years while Guangzhou Automobile Group said it will work with its joint-venture partner Honda Group Co to make electric cars.

"The new energy vehicle opportunity here is probably bigger than in other countries," BMW board member for sales and marketing Ian Robertson said.

"There is a clear agenda to develop (green) technology."

BMW is working with PSA Peugeot Citroen to develop hybrid automobile technology, partly with an eye on China\’s huge potential.

The show, which opened Tuesday to the media, covers 230,000 square metres (2.5 million square feet) of exhibition space.

About 2,000 car and parts makers from 20 countries are participating, showcasing 75 new car models, 19 of them making their world premieres. A total of 1,100 vehicles will be on display.

Having already conquered China\’s coastal areas and first-tier cities such as Beijing and Shanghai, the industry is looking to less-developed car markets in the country\’s vast interior for future growth.

GM\’s Baojun, for example, is a compact sedan priced between $10,000 and $15,000 that the company says was designed for young drivers in second- and third-tier cities, home to tens of millions of people with growing buying power.

GM, Ford, and BMW were among the foreign automakers who also announced plans to dramatically expand their dealership networks throughout China.

Organisers expect 700,000 people to visit the show once it opens to the public for six days beginning on Sunday.